Precautionary Principle: Profiting With Care

Simply stated, the Precautionary Principle asks us to err on the side of caution. Following the Precautionary Principle as business leaders, for example, we would avoid using product ingredients that may be harmful in addition to avoiding those that we know are harmful.

Using the Precautionary Principle we would do more than simply follow the law – we would make the decision that would be in the best long-term interests of our customers and other stakeholders.

Proactive Leadership for the Long Term

The Precautionary Principle (PP) is a proactive way for leaders to make decisions that are the best over the long term. Using the PP, we take the long view and make decisions that offer the most protection to our company and its stakeholders.

It was originally formulated as a response to the constraints of policy and science in sufficiently addressing complex and uncertain risks and its consequences to human health and the environment (Tickner, 2003: xiii).

Using the Precautionary Principle as a basis for making decisions helps businesses avoid the temptation to squeeze out extra profits while something is “still legal.” The PP uses a broader definition of what is “responsible” and a narrower definition of the level of “harm” that is acceptable.

There is still some disagreement about how widely we should use the PP. Some leaders think precaution is critical and others think it is unnecessary. Here are two examples of what can happen when we do and do not use the PP in business decisions:

Example 1: Embracing PP and Avoiding Suspected Carcinogen

Erring on the side of caution, a company using the Precautionary Principle would stop using ingredients that were suspected carcinogens rather than waiting for a series of studies that showed with certainty that they caused cancer.

Regulations often lag behind science and consumer experience. Waiting for scientific certainty and for an ingredient to be banned, a company could harm millions of people and poison the environment.

Precautionary companies would take action to avoid the harm that might take place while we were waiting to be “sure” that it was actually harmful.

Example 2: Choosing to Do Harm

NPR did a news story on the cosmetics industry several years ago that revealed that some cosmetics manufacturers were using ingredients that were suspected of causing harm to people and had been banned in other countries. The cosmetics manufacturers were selling purer versions of their products in the tighter-regulation countries, but still selling the suspected harmful ingredients here in the U.S., where the Precautionary Principle had not yet fully been embraced.

Why would any business continue using ingredients suspected of being harmful? If they were using a narrow profit-based view of responsibility it could easily happen. If the banned ingredients were cheaper, and they were not yet illegal in the US, then legally they could be used.

……But is that a responsible decision?

The Importance of Profiting With Care

In a profit-based view of business responsibility, profits are not balanced against possible harm. That short-sighted view does not honor the way that we now understand our global leadership responsibilities. The world is more connected, and that connection informs consumers.

Businesses continuing to use ingredients that have been banned in some countries as possible carcinogens are finding that global shopping sites now rate them lower on ethical business.

The emergence of the PP has marked a shift from postdamage control (civil liability as a curative tool) to the level of a pre-damage control (anticipatory measures) of risks.

The Precautionary Principle is gaining momentum as the way the world can best deal with risk and human and environmental safety. Looking at ethics on a global scale, and our world as one global community, it makes sense to many to err on the side of caution when evaluating possible harm that choices could cause.

…philosopher C. West Churchman had struggled with the question, “What is morality?” He eventually decided that morality is “what a future generation would ask us to do if they were here to ask.”

Edward Cornish in his book Futuring: The Exploration of the Future, published by the World Future Society

Global principles (developed by diverse global groups) are including precaution as a required element of responsible business. The U.S. has now recognized the importance of Precaution as a guiding principle:

We believe: (number 12) even in the face of scientific uncertainty, society should take reasonable actions to avert risks where the potential harm to human health or the environment is thought to be serious or irreparable.

There are 17 international treaties and agreements that include the Precautionary Principle on pages 20-23 in The Precautionary Principle in Action: A Handbook, written by Tickner, Raffensperger and Myers for the Environmental Science Health Network.

Profitability is usually the reason that businesses continue using products after they are identified as possibly harmful or known to be harmful. At the same time that our economy struggles to regain stability, consumers are increasingly aware of how they are affected by the long-term greed of business leaders who have chosen to ignore precaution and cause harm. Consumers are aware that if you use an ingredient or process that you know MIGHT be very harmful in the long run, then you know that you MIGHT be causing them great harm, and you are still choosing to use that ingredient.

Today’s more informed consumers are seeking businesses and products that go well beyond following laws to intentionally demonstrate a higher level of care and concern for constituents.

Because the Precautionary Principle is broad and still being interpreted, I’ve included resources below that explore the complexities of its various interpretations.

Questions For Discussion:

1. In what areas are we applying the Precautionary Principle?

2. Where are we ignoring precaution so that we can increase profits?

3. What are the likely long-term results of our decisions as shown in our responses to questions 1 and 2 above?

4. What could we do now to apply the Principle of Precaution and how could that improve our brand?

About Linda Fisher ThorntonLinda Fisher Thornton is Founder and CEO of Leading in Context, and author of the award-winning book 7 Lenses. She teaches as Adjunct Assoc. Prof. for University of Richmond SPCS. She is leading a movement to help leaders and organizations Unleash the Positive Power of Ethical Leadership.

One Response to Precautionary Principle: Profiting With Care

Nice article! As I read your explanation of the precautionary principle, I thought of how it is compatible with utilitarianism. Many of the business leadership scandals of the last 12 years (Enron, Tyco, Goldman Sachs, etc.) all have a common element where leaders opted for short term, risky profit outcomes over their larger responsibilities to consumers and society. The precautionary principle reminds us that business leaders should never forget these larger responsibilities as they also pursue profitable outcomes.